Securities in tollroad operator Transurban (TCL) went into a trading halt yesterday after the company announced a $1.025 billion raising to help fund the $2 billion acquisition of the Brisconnections-owned AirportlinkM7.
The deal will make Transurban the owner of six tollroads in Brisbane, including three that are adjacent to the AirportlinkM7.
Transurban will raise $1.025 billion through a fully underwritten pro rata accelerated renounceable entitlement offer with retail entitlements trading.
The raising has been priced at $9.60 a share, which is a 5% discount to the last close of $10.32 on Monday night.
Transurban last raised capital at $6.75 a share in April last year to fund the Queensland Motorways acquisition. That deal included a $2.3 billion renounceable rights issue and a $400 million selective placement.
Transurban said it would pay $1.87 billion for AirportlinkM7, plus stamp duty of $108 million (a bonus for the Queensland government) and transaction costs of $23 million.
TCL 1Y – Transurban picks up Brisbane’s airport link tunnel
The tollroad opened to traffic in July 2012 and was built in a public private partnership with the Queensland government. BrisConnections holds the contract to operate the 6.7 kilometre stretch of road for a further 38 years to 2053.
Transurban said in a statement that AirportlinkM7 “is a quality urban tunnel completed in July 2012, connecting Brisbane Airport and the Australia TradeCoast with the CBD, and Brisbane’s northern, southern and western suburbs”.
The asset was acquired for 51% of the build cost, the company said.
In addition to funding the purchase, Transurban said the raising would also be used to reduce debt and provide "financial flexibility to pursue its pipeline of investment opportunities".
Transurban chief executive Scott Charlton said in yesterday’s statement that Transurban’s existing assets in Queensland would allow the company to operate AirportlinkM7 more efficiently.
"We expect to achieve EBITDA margin enhancement through integration with Transurban following this acquisition.
"AirportlinkM7 is a quality urban asset with observed traffic history and substantial additional capacity."
